The new bull run

On surging global equity markets
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First Published: Wed, May 08 2013. 01 01 AM IST
The S&P 500 in the US has been touching new highs in recent weeks. Photo: Bloomberg
The S&P 500 in the US has been touching new highs in recent weeks. Photo: Bloomberg
Global equity markets have been on a roll. The MSCI World Index is at its highest level since June 2008. The S&P 500 in the US has been touching new highs in recent weeks. Japan joined the party after the aggressive stimulus plan announced there. The Nikkei index hit a five-year high on Tuesday.
In contrast, equities in countries such as China and India are yet to fully regain the ground they lost after the global financial crisis. This is intriguing if one looks at the growth in underlying economies since 2008. The sizes of the Chinese and Indian economies have approximately doubled in these past five years while the US and Japanese economies have grown by a far more modest 15% and 6%, respectively.
What explains this Decoupling 2.0? Was the overvaluation of Asian equities higher in 2008? Or is the current rally in the developed markets unsustainable? Take your pick.
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First Published: Wed, May 08 2013. 01 01 AM IST
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